AMD is a far larger market than DME. GS thought a successful DME trial was worth about 60c to the SP over their pre-DME PT of $4.60.
However, the more important point is that AMD and DME trials have tested efficacy with separate market leading drugs (Lucentis and Eylea). This is why the DME trial is important. i.e. it gets the owners of both drugs interested in a potential deal, which creates competitive tension, which increases the bid.
I feel like there's a lot of misunderstanding on this forum about why Opthea is a good investment. My thesis laid out below:
- Call option on M&A/licensing event betweennow and AMD phase III results (1H 2023)
- Then.. Do you risk binary phase IIIoutcome? Approval stats for ophthalmology phase III are 58% - success gives you a SP >$10, but lots of risks including difficulty with formulating a single injection, hard to get govts to pay for combination therapies, maybe patients care more about duration than acuity, successful trials from non-anti-VEGF competitor drugs etc etc
Why might M&A/licensing event occur?
- Noveltreatment in a proven category of therapies (anti-VEGF) vs e.g. gene therapies which are largely unproven to date. Also one of the only therapies aimed at increasing acuity rather than duration
- Designed to work as a combination therapy with major existing drugs Lucentis and Eylea, both of which are coming off-patent. This is critical - it means that the owners of these drugs are incentivised to compete for a deal
- Verylarge market. >US$10bn sales for existing treatments Lucentis, Eylea, Avastin. OPT-302 would piggy-back on Lucentis (US$3.7bn) or Eylea (US$6.6bn). Note that OPT-302 would be mostly additive to these sales, it would not replace them directly. i.e. don't assume potential sales are US$10bn, because they're not
- Combinationwith OPT would protect existing sales for Lucentis/Eylea, by making the combination therapypatented and the most effective treatment (for acuity)
- 12-18 months cash runway to run M&A/licensing auction. i.e. they have breathing room to run a competitive process
If DME result is successful, I'll begin selling down at the earlier of announcement of M&A/licensing deal or $6. I don't think I'll hang on for the phase III trials, which is ages away. Too much can go wrong in that time.
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3 | 46810 | 0.460 |
Price($) | Vol. | No. |
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0.490 | 156010 | 6 |
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